New data shows the Brazilian economy has shrunk for the first time since 2009 after the Latin American country's GDP contracted in the third quarter of the year.
Figures released today (December 3rd) by the Instituto Brasileiro de Geografia e Estatistica (IBGE) confirmed the economy was 0.5 per cent smaller between July and September.
With analysts having predicted a contraction of 0.2 per cent for the quarter, concerns could grow over the future of the country's economy.
Brazil had coped better than most nations during the global economic crisis and had expected to go from strength to strength in the coming years, with the country hosting the Fifa World Cup next year and the Olympic Games in 2016.
Flavio Serrano, an economist at Espirito Santo investment bank, previously predicted growth of 2.5 per cent for the year, but has now lowered his forecast to 2.2 per cent or 2.3 per cent.
"It shows that we were not able to grow despite various economic stimulus measures," he added.
Brazil is currently making large investments in its infrastructure to get ready for the Olympics and the World Cup and the country recently increased interest rates to combat inflation.
Find up to date information on the FTSE 100 and spread betting strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.